All Forum Posts by: James Triano

@Darrell Tucker

You really shouldn't need more than your articles of incorporation and your Tax ID number to open your account.  Just go in there with all of your documentation and you should be good to go. 

They won't need your business plan or credit information unless you're also looking to apply for a loan.  Good luck!

@Andrew Smith

I don't think the lender is too far off.  I typically estimate by purchases to cost about 30% of the purchase price if I include a 20% down payment in that number.  This accounts for transfer taxes, title fees, title insurance, etc.  It's usually a bit lower but it's a good rule of thumb.  

One option is to request that the seller pay closing costs when you go to make the offer.  I'm assuming you're pre-approved already?

Another option is to ask friends/family to partner with you to raise the money. 

I think those would be the two quickest considering your time constraints.  I know there are many, many more out there but those two come to mind first.  

@Andrew Patocchi

Give the Bigger Pockets calculators a try.  They're a fantastic source and a comprehensive view of the formulas needed to analyze a potential deal.  

What I've done is "reverse engineer" the BP calculators and create my own spreadsheets that incorporate specific items I felt the calculators were missing (minor details and region specific items). 

Give them a try and then come back here if you have any questions.  

@Account Closed

That is great news, I know when I was 23 looking for a house that it was tough because I didn't have much credit.  I'll be interested to see how many can benefit from this vs. being set back by it - I know many of my college friends had no idea what it meant or what to do when they got a cable bill in the mail and they would always pay them late. 

If only Millennials (we) actually cared about their credit score instead of eating a $90 sushi meal and posting a picture of it on Instagram we could actually get somewhere....

@James Letchford

Definitely set yourself up by having your entities own other entities as @David Dachtera has mentioned.

Personally, every new project gets its own LLC if it's a buy and hold property. I want all of my assets separate from one another if something were to go south from a liability perspective. Generally, on flips you can re-use the business if you've made some money and just want to roll the money forward into another flip. But every rental property should be in its own LLC/S-corp/C-corp if you're planning to buy-and-hold for a long period of time.

To your bank account question - yes, absolutely.  Each property should have two bank accounts, in my opinion.  It should have an operating account and a deposit account.  The operating account should be to receive rents, pay expenses, and have a debit card attached for quick spending items.  The deposit account should hold your security deposits, pet deposits, utility deposits, etc.  

@Jay Helms

I've got to agree with what @Michael Seeker said.  If you're getting any sort of employer match, at least do the minimum to get that.  A guaranteed return (even if it's a 10:1 match, still 10%) is nothing to scoff at in this rate environment.  Take your tax savings, employer match, and invest it in a low cost index fund and just let it build over time.  

Of course, there are downsides like locking the money up (to some extent), the limited investment options likely offered, and reducing your take-home pay but they're often outweighed by the match. If you weren't getting a match, I'd say take the money, and invest it in a Traditional IRA before investing in a 401k plan and you'll still get some of the tax benefits today.

As an aside, anyone under the age of 40 should really be maximizing Roth IRA's as well. Paying the income tax now, while you're young and (hopefully) earning less than you will be in the future, will allow your investments to grow and provide you with tax-free income in the future.

@Clayton Miller

With an Econ degree there's a good chance you could get a job as a Financial Analyst at a commercial real estate firm if there's one near you.  I think that would be your best bet if it's something you're interested in.  You'll learn about accounting, taxes, financial analysis, modeling, and budgeting (I know because I am one).  However, you're not looking at more than $45,000-$55,000 for an entry level position.  Maybe that's enough, maybe it's not.  

I know I've hired Econ majors and they do quite well but you will be competing with Accounting/Finance majors in that field.  If that's not something you're interested in then you could also get into banking/mortgage brokering but that's like the wild west. 

@Nina V.

This question comes up a lot and it really depends on your personal situation and your strategy going forward.  

I do have one FHA property still in my personal name but also have others in LLC's. Part of this is because of a partnership and the other is because of asset proteciton. I would definitely consult a local attorney and get an accountant involved as well.

Overall, your goal is about asset protection and an LLC can definitely get you there. They don't cost more than a few hundred to set up but it's also not something to waste money on if there's no need to and you're just starting out.

One thing I use is the Evernote clipper in Google Chrome.  It allows me to save the articles in "reader" format then I usually hit them with a #NeedToRead tag.  Then, when I'm sitting somewhere like the airport, doctor's office, etc. I can just search for unread articles!

Best way I've found so far. 

@Jeff O'Neal and @Steve R.

Holding expenses like you mentioned for your specific property should be incorporated into your basis and be part of the "inventory" you're holding.  

Mileage expenses, meanwhile, are a bit different.  Since you mention specifically going to and from the property you're rehabbing (vs. out driving around looking at potential properties), then this should really be capitalized as well.  If you can directly reflect the cost of good sold (in this case your property), you should really capitalize it.